If the International Fisher Effect (IFE) Did Not Hold Based

question 56

Multiple Choice

If the international Fisher effect (IFE) did not hold based on historical data, then this suggests that:

• A) some corporations with excess cash can lock in a guaranteed higher return on future foreign short-term investments.
• B) some corporations with excess cash could have generated profits on average from covered interest arbitrage.
• C) some corporations with excess cash could have generated higher profits on average from foreign short-term investments than from domestic short-term investments.
• D) most corporations that consistently invest in foreign short-term investments would have generated the same profits (on average) as from domestic short-term investments.

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Definitions:

Retweets

The act of sharing someone else's tweet with your own Twitter followers, essentially broadcasting it to a wider audience.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Nonresponse Bias

A distortion in survey or research results caused by a significant portion of participants not responding, potentially leading to unrepresentative outcomes.

Final Sample

The ultimate selection of units or participants that have been chosen for a study or survey.